Debjyoti Paul

10/04/2016

See where digital is going next. Sign up for our newsletter.

Toward a more holistic understanding of digital transformation

For all the talk about digital transformation, this phrase still lacks a clear definition. In a series of posts on the Bluefin Solutions blog, guest blogger David A. Smith, Founder and CEO of Global Futures and Foresight, brings some much needed clarity to the concept and offers some ideas on how organizations can prepare for a successful transformation. Bluefin Solutions is a Mindtree company and global SAP consultancy that specializes in technology strategy, implementation and change.

What does digital transformation really mean?

The concept of digital transformation has received considerable attention in the past several years. However, some of the discussion has failed to grasp its full meaning.

In his first post in a two-part series on the Bluefin Solutions blog, Smith provides the most concise definition we’ve encountered:

The process of digital transformation is complex, and far more holistic than simple plug and play technology, as it entails a complete rethinking of organizational and business models.… At its core, digital transformation offers an ongoing strategy for identifying, understanding and responding effectively to change.

This view of digital transformation matches our day-to-day experience at Mindtree. Digital technology may be the driver of change, but adopting the right mix of tools without reevaluating core business processes will not suffice. For several years now, we have defined digital transformation as a business transformation enabled by technology. In fact, defining and communicating strategy and building a test-and-learn culture within the organization are critical factors for success.

Every company is a digital company

In his follow-up post, Smith states that: ”In response to the challenge posed by digitally enabled upstarts, established companies are adopting Gartner’s advice that ‘…every company is a technology company.’” He goes on to explain that, while some companies in traditional industries like banking have shifted toward self-identifying as technology companies, it takes more than a new label to catalyze and manage the level of change required to thrive in the digital economy.

It is the piecemeal nature of digital transformation that chiefly blocks or facilitates the failure of many attempts at change. Many established organizations, notes Harvard Business Review, hope that they can stay competitive making only minor tweaks, yet these changes often produce only localized results that fail to ripple across the organization.

At Mindtree, we believe that digital transformation is based on four stages of digital adoption, which act as a platform for providing personalized experiences and gaining insight into how well they perform. Described in full detail in our flip book, these four steps are to create digital customer experiences, digitize the value chain, develop sense and respond systems and shape innovative business models and partnerships.

Considering the massive change required, the companies that are excelling in digital are those that rely on a network of partners. These relationships can help fast-track the development of specialized capabilities like analytics, while also delivering scale and efficiency. It is important to note that, in the digital ecosystem, companies also need what we call an anchor partner, who can bring together the contributions of many providers in a seamless way and, most important, take responsibility for demonstrating the business impact of all of these activities.

Faced with all of this complexity, it is no wonder that some companies have put off digital initiatives. But, as Smith points out, those businesses risk their very survival in the wake of continued disruption.